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Skill shortages and the future business challenges we must not ignore

by jcp
gawdo

Mike Snape, Partner at Oliver Wight EAME

We are seeing many of the challenges that faced businesses in 2021 continuing into 2022. Existing supply chain issues persist and could get worse, as the Russian invasion of Ukraine has the potential to cause extensive disruption globally which will no-doubt have implications for supply chains.

In addition, companies will be dealing with the ramifications of a much needed focus on climate change and net zero pledges but alsoinflation, higher living costs and skills shortages. Recruitment and retention for many businesses will be a key challenge going forward far beyond 2022.We are all hearing the buzzword ‘Great Resignation’, terminology from America that predicts the mass job resignations after Covidand data is showing that it is not just anecdotal.

According to a study by the Centre for Economic Performance one in five employers are raising issues of retaining staff. Companies are struggling to recruit and retain employees due to external factors such as Brexit and a general skills shortage but also because companies are upgrading systems and automating but not upskilling or developing their employees in tandem. Dissatisfied employees then resign leaving huge gaps.

We are seeing companies using a range of tactics to overcome the staffing issues, everything from more flexible employment terms to higher wages. Around 30 UK businesses are taking part in a six month trial of a four day work week later this year and one of the organisers said the policy could help employee retention.

Companies need to plan ahead and link their business strategy with their HR plans. As part of this companies need to not only upskill but look ahead to what type of people they need to start recruiting ahead. They will need to engage with the younger generation early, perhaps even at schools and certainly engaging with tertiary education to build excitement and promote the opportunities which exist in manufacturing and supply chain today.

We are advising companies to invest not just in training but also in education and development as improving skills is key to addressing labour shortages and promoting productivity, wages and social mobility

We are also seeing a link between recruitment and retention to companies that have good environmental credentials. The boom in sustainability practices in the workplace isn’t just good news for the planet, or even companies’ finances. Research suggests it’s a prime driver in attracting key talent, with job seekers increasingly drawn to green organisations that talk the talk when it comes to the environment. Certainly retailers such as M&S found this to be the case and Plan A, its sustainability strategy has helped it attract the best talent over several years.

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